US Marshalls Crack Down at SEMA

From bestride.com:

BREAKING: Eight Aftermarket Companies Raided by US Marshals at SEMA

For years, there’s been a buzz around the Specialty Equipment Manufacturer’s Association (SEMA) show in Las Vegas that offshore companies were reverse-engineering knockoff products and then displaying them with impunity at SEMA and at the nearby Automotive Aftermarket Products Expo (AAPEX). On Wednesday, eight companies had their booths shuttered and their inventory raided by Federal Marshals at those two shows, accused of multiple copyright and trademark violations.

The accusations stemmed from a complaint from Omix-ADA, which is the world’s largest independent producer of aftermarket accessories for Jeep vehicles, alleging that the companies were counterfeiting numerous Omix-ADA products, including bumpers and the company’s popular Spartan Grille.

The aftermarket industry is rife with patent and intellectual property issues. On the surface, these products may look the same, but legitimate companies that produce superior products subject them to rigorous testing to meet safety requirements. Producers of counterfeit products may not just be delivering an inferior product, but one that can be dangerous in a crash.

Omix-ADA had prior knowledge that these companies would be displaying products that were blatant knock-offs of its products before the show. “This is something we were aware of and we talked with SEMA about how do we go through the steps because we don’t want to upset the industry at an event like this,” said Henk Van Dongen, Omix-ADA’s Director of Marketing. “So they recommended a few local attorneys and we got all of our paperwork in place by Monday night, then Tuesday we went to the judge.”

District Judge Gloria Navarro issued a preliminary injunction and seizure order Tuesday. According to Automotive News, the companies were identified as Changzhou Jiulong Auto Lamps Factory, Guangzhou Vcan Electronic Technology Co., Maxgrand Ltd., Sanmak Lighting Co., Shenzen Unisun Technology Co., and Unity 4wd Accessories Co. Judge Navarro scheduled a preliminary hearing for Nov. 10.

“Normally they have a hearing and those companies would be served and then have to show up for another hearing – and if they don’t show up then we win, but the judge took one look at the paperwork and said there is no denying this.”

US Marshals raided the companies simultaneously, preventing them from interacting with attendees and boxing up evidence including product, as well as all electronic devices and paperwork.

”Everything gets copied and looked at, and then the companies get them back and we can pursue additional legal action if we want to,” Van Dongen said. “SEMA has always said that if something like this happens, then the companies found to be on the wrong side – so to speak – are no longer allowed to come back to the SEMA show.”

”This is obviously about our product line and intellectual property because we need to protect our customers and retailers. But it’s not just about Omix and Rugged Ridge, it’s something that is industry-wide and something that has been building up and becoming more and more rampant over the past two to three years.”

Jeep accessory manufacturer TeraFlex had the same issue. It engineered its spare tire mount to solve a specific issue with the standard Jeep spare tire mount, and then subjected its design to the rigors of Chrysler’s own product test facility, where it underwent a 14,000-cycle slam test, 100,000 cycles of load testing, and 1,000-hour salt spray test. Nevertheless, competitors knocked off the product with abandon, to the point that TeraFlex made a hilarious video about it:

You only have to visit Amazon or eBay to see the profligate availability of counterfeit products knocked off from legitimate companies, but neither Amazon nor eBay seem all that interested in shutting the practice down. “The way the market is these days – a company can be anywhere in the world and produce counterfeit products that are hard to catch in customs,” Van Dongen said. “These individual pieces, there is no way to intercept them and it’s a major problem, so that’s what really started this.”

”Look, if someone else wants to go out and make grab handles, then make grab handles, but when companies spend all kinds of engineering time, and time to create patents and design patents, well then absolutely stay away from that. We all spend a lot of time and effort into building the companies we have, and competition is fair and if it’s done fairly then let the best company win.”

Van Dongen said Omix-ADA plans to take legal action as far as they can against these eight companies.

“We’ll have to see how far we can legally pursue the companies that we dealt with today and we’re going to be vigilant going forward,” he said. “It’s slow going, we’re just getting started with this but you can see we are focused on it.”

”It’s a little like playing whack a mole, and hopefully if we whack them one time too many, then they won’t be coming back.”

Anybody at SEMA want to add to the story? Did anyone see anything?

Maybe they needed more military guys at the show. But Bill Murray was too busy at the Cub games.

...and those counterfeiters didn't even give Lee Ermy the courtesy of a reach-around...

Well there goes my eBay civic coilovers....

I for one approve. The less garbage we have on the market, the less the legit companies can offer items for. No more 500$ strut bars.

That's half the story, the other half is those who purchase by price alone. I wonder how much knock-off stuff is at Harbor Freight.

I think this is good for all of us. Or at least for all of us who need things to last longer than one Challenge weekend.

Meh. How many different designs of SBC pistons/intakes/cylinder heads before the lines are so blurred, you can't tell them apart? And that's from the normal suspects....

Once you can go after the garbage knockoff body parts that insurance companies use, I "MIGHT" be more than interested.

The knockoff companies are looking to get small stores and internet retailers to shill their crap. No "real" store even a harbor freight can sell blatant patent ripoff products without serious issues.

This is a good thing. Especially for legit aftermarket companies, such as the ones that advertise in our favorite magazine.

I'm all for it and think it's overdue. If IP is not protected then innovation stalls. There needs to be more of this happening.

It's one thing for a company to make a cheap ripoff of a part when the original company stops producing it, but otherwise, I'd rather see more good quality options and more variety on the market.

moparman76_69 wrote: The knockoff companies are looking to get small stores and internet retailers to shill their crap. No "real" store even a harbor freight can sell blatant patent ripoff products without serious issues.

Hahaha.

Oh wait, you're being serious?

Fact: there is NO SUCH THING as a privately owned Chinese company. ALL of them, regardless of what they do, or make, or call themselves ARE the Chi-Com government. The only way to stop them from selling all their blatant, unapologetic, worst possible quality, and often deceptively labeled (sometimes right down to the logo font) e36m3, is to flat out ban them from doing business with any entity that sells ANYTHING within or shipped to the U.S. I would go so far as to convict and imprison anyone who knowingly sells illegally reverse-engineered or copyright-infringed products. I would declare both ends to be guilty of smuggling contraband. The vast number of really good aftermarket companies that have been forced out of business by these berkleyers is boggling. The Chinese government/pseudo-companies can just go burn in hell.

I have been involved with trade shows for over 25 years, and I have personally seen the rise of foreign "guests" blatantly walking the halls with cameras, GoPros and video cameras. Despite all of the rules saying no photography on the floor, these people would be out there with full DSLR's taking close-up shots of products, even being so bold as to flip items over and get all angles. At first, exhibitors were happy to have the expanded interest, but soon after, the knockoffs started. Most shows are much more strict about photography these days, some even have guards on patrol to stop it, but cellphone cameras are everywhere.

Being in charge of setup and teardown of our booth, I have even seen foreign "guests" walking the floor well after the show hours are over. For the cost of a 10-foot booth, they have full access to the floor and can walk around and take all the pictures they want. People have had products stolen from their booth after they packed it up and were waiting for the truck to come pick it up!

The thing is, you can't legally do anything to the companies back in China. Companies have tried, and the government (who gets a big piece) says "I don't see the resemblance" every time. So stopping them here is the only option, and I give this company major props for doing this. It's funny to joke about buying cheap parts for our cars, but if YOU invented a great product that all autocrossers wanted, and bore the cost of patenting and testing and manufacturing it, how would you feel if people started buying a cheap knockoff from E-Bay for 1/2 the price?

In reply to pinchvalve:

If I had my way, the United States Attorney's Office would begin criminally prosecuting EBAY for knowingly providing a medium through which illegally ripped off products are sold. As for the "show guests", as far as I know there is no law preventing the show organizers from denying ALL Chinese companies a display permit; that would make it an arrest-able prosecutable offense for any of their "employees" who got caught in the venue after-hours. If I were a legit vendor at a show like SEMA and I saw someone snapping photos of my newest designs I would no-e36m3 forcibly remove their camera from their hands, remove the data card from it, and smash it to bits on the concrete right there for all to see. If enough legit SEMA-etc. vendors would start getting physical about protecting their IP from these berkleying Chicom thieves there just might would be a drastic drop in IP infringement.

WildScotsRacing wrote: In reply to pinchvalve: If I had my way, the United States Attorney's Office would begin criminally prosecuting EBAY for knowingly providing a medium through which illegally ripped off products are sold. As for the "show guests", as far as I know there is no law preventing the show organizers from denying ALL Chinese companies a display permit; that would make it an arrest-able prosecutable offense for any of their "employees" who got caught in the venue after-hours. If I were a legit vendor at a show like SEMA and I saw someone snapping photos of my newest designs I would no-e36m3 forcibly remove their camera from their hands, remove the data card from it, and smash it to bits on the concrete right there for all to see. If enough legit SEMA-etc. vendors would start getting physical about protecting their IP from these berkleying Chicom thieves there just might would be a drastic drop in IP infringement.

Honestly, that might make you feel better, but I doubt it would help. They could just buy the product and reverse engineer it from there. And with modern CAD systems, it's easier than ever to do that.

Displaying products that infringe on a patent and a trademark, then bringing them to a trade show where the patent holder is actually going to attend takes some major chutzpah. I'm glad they got nailed.

In reply to Tom_Spangler:

Which brings the fight back to the U.S Attorney to start nailing Ebay as a IP theft conspirator...

WildScotsRacing wrote: If I were a legit vendor at a show like SEMA and I saw someone snapping photos of my newest designs I would no-e36m3 forcibly remove their camera from their hands, remove the data card from it, and smash it to bits on the concrete right there for all to see.

I have many friends that USED to be in the textile business. They once caught individuals from a certain Asian country inside one of their looms taking pictures.

Chinese be like the Honey Badgers of the patent infringement world. They don't give a berkeley. I am actually surprised they don't carry 3D scanners to the shows.

... before you get too bent out of shape, you have to be aware that this is a cultural thing. China has a core belief that all innovation is public to be used for the betterment of the country. This leaves trade secrets as the only way to protect your territory.There are benefits to this policy when you are trying to drag a country from the middle ages into the modern world.

The irony is that they are able to walk both sides of the patent street: While the Chinese government wholeheartedly endorses IP theft, should any non-Chinese company come close to Chinese IP, they will destroy you. When you know the rules and you know they don't apply to you, it is easy to win the game.

The irony of 0mix calling out others for copyright infringement is beyond hypocritical. If anything they just made it harder for themselves to get their own stuff made overseas. The owner has been trying to buy his way into heaven for years after absolutely screwing over a lot of people in the industry. The gallant "stand" they took against knockoffs is just another piece of the redemption puzzle.

The elephant in the room is getting people to pay more for stuff made here. Since that's hard we take the easy way out and demonize the mfgs. Is it their fault? Absolutely, but only 50℅; the other half of the blame is us consumers.

Honestly, I love me some cheap Chinese knock off parts from eBay.

They're more capitalist than we are - if there's a buck to be made, there's a Chinaman (that's not the preferred nomenclature) making that buck.

As for having your stuff made overseas, you pretty much have 6 months before the first knockoff hits your competitor's shelf. Sometimes it is a simple as tracking down which factory is making your competitor's part and asking if they will make some for you. Your competitor already paid for the tooling costs, so it is no big deal for the factory foreman to run off a few thousand extra if you buy a container. Just hope that you get first container quality, because by the time the factory cuts corners to recoup their initial quote (usually the third container) the quality will be absolute crap.

If you want to do it the hard way you send your overseas buyer a sample of your competitor's part and say "make me some of these". Unfortunately sometimes they are too good at their job and you end up getting a part back that is a great copy...right down to the competitor's logo. Even if that happens your competitor still saved you the time of engineering the part.

I've walked the New Products Showcase at SEMA and watched guys with cameras, tape measures, even micrometers going over some new product then sneaking away. It is just insane.